In what is said to be the first global study on smart TV ad effectiveness,
research from smartclip and LG Electronics has revealed that customer demand
for connected TV is opening a "booming" platform for advertisers. Why
you ask, because television, STB's and blueray manufacturers are beginning to
produce devices that contain digital sleuthing technology that tracks the live
and recorded programs that viewers choose. Knowing details about what an
individual is watching could better pinpoint which ads to display, opening the
door to new ad revenue
Leading the charge on the technology side company's like Cognitive and
Gracenote are working with the manufactures to integrate the software into the
various platforms. In a interview with Bloomberg earlier this week Cognitive
chief Michael Collette stated that the software could provide manufacturers
with annual revenue that would boost the one-time-only amount of around 5
percent that they make on the sale of a TV set, which averages around $4. The 4
bucks they make on a set, they can at least double with the $5 they may make a
year from the new recurring revenue.
This past February Ted Sarandos, Netflix’s chief content officer, said during an interview with GQ magazine “the goal is to become HBO faster than HBO can become us.” The company, once the leader in the DVD mail order rental business has masterfully reengineered itself into the leader in online video streaming. A strategy that appears to be paying off when yesterday the company released its first quarter results and they were much better than analysts expected. Its stock soared 24% in after-hours trading to $215.40 after they announced that it had gained two million new U.S. customers in the first three months of 2013, a total of 29.2 million and a additional 1 million internationally.
At $7.99 per subscription, revenue nearly equaled the full price of the $100 million "House of Cards" series that debuted early this year. So did "House of Cards" lure 2 million more people, alone? That's doubtful and as Piper Jaffray analyst, Michael Olson, told the New York Times, ”It appears original programming may be driving better subscriber numbers. At the least, we believe original exclusive programming is reducing subscriber churn.” A very important factor in the subscription business and a strategy that helped them to edge out HBO in total subs for the first time. That said, Netflix has a ways to go before catching up worldwide. According to SNL Kagan, HBO has 114 million subscribers across the globe, a far cry from the 7.14 million Netflix has outside the U.S. Now... I must get back to my binge-viewing... popcorn anyone?
National CineMedia invests in IdeaCast, a provider of advertising to fitness centers and health clubs. NCM is investing up to 7.0 million in 6% preferred stock and will have an option to acquire additional common stock such that NCM's overall investment (including the convertible preferred stock) 
represents 50.1% of IdeaCast's fully diluted common stock. Through a series of multi-year agreements with CNN, CNBC and MSNBC, IdeaCast exclusively re-distributes network programming to and manages program ad sales for health clubs. The network currently includes nearly 600 locations and has secured agreements with an additional 500 to join its network over the next several months. At that time, the IdeaCast health club network will cover 116 markets including all top 25 markets and 45 of the top 50 markets, representing over 200 million club visits per year. The network includes Lifestyle Family Fitness, Club One, Fitness Formula, Spectrum and Town Sports International (NY Sports Clubs, Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs). National advertisers currently on the network include American Airlines, AT&T, Dunkin' Donuts and Quaker. Link: Yahoo! Finance June 26, 2007 - National CineMedia Invests in Health Club Digital Media Network Operator IdeaCast
An interesting story in todays NY Times compares the advertising trends in the U.S. with the U.K, 
where online is growing at a remarkable 40 percent a year and is expected to account for 10.5 percent of all advertising at the end of this year verses 5.6 in the U.S. What’s the primary difference? Some say the difference comes down to American media's reliance on television. TV spending is expected to top $72 billion in the U.S. this year; In Britain most advertising is national, there are fewer TV channels and the audience is much smaller, so far less is spent on TV. and local markets in the U.S. have been slow to spend on the web. Link: The New York Times – Dec 4, 2006 – The Future of Web Ads Is in Britian
The Giants’ 36-22 victory over the Cowboys on ESPN’s Monday Night Football was viewed by the largest audience in the history of cable television according to an ESPN spokesperson. The network stated that the NFL contest was seen in an average of 11.807 million homes, based on a 12.8 rating, translating to 16.028 million viewers two-plus. The previous record was CNN’s November 1993 NAFTA debate between then-Vice President Al Gore and Ross Perot on Larry King Live, which was seen in 11.174 million homes. The MNF ratings also topped those for four CNN telecasts of the Gulf War in 1991, topped by 11.742 million homes Jan. 17 of that year.
Digital out-of-home networks are popping up everywhere from high-rise elevators to gas station pumps to public rest rooms, creating new places and states of mind for marketers to reach their
consumer and business prospects. The new networks, a subset of the outdoor media industry is sometimes referred to as place-based television. The growth is being spurred by a combination of entrepreneurial zeal from venue operators looking to tap the fast-growing advertising sector, as well as from increasing demand form advertisers and agencies seeking alternatives to traditional media. Marketers are gravitating to the new medium because of it’s ability to deliver conventional sight, sound and motion advertising that big TV advertisers have grown accustomed to, as well as their ability to deliver an extremely relevant message to consumers at a decisive moment in their purchase cycle. According to a new report released by marketing consultants Profitable Channels, approximately 700 digital out-of-home networks have launched since 2002 and they are estimated to account for $1.2 billion in national ad spending this year. Links: MediaDailyNews.com 09/12/06 – Digital Ad Boom shifting from Online to Out-Of-Home
I’m a big supporter of the emerging mobile advertising industry. London-based Informa Telecoms & Media said in its recently released report that the proliferation of cheap, high quality multimedia mobile handsets together with the growth in high-speed networks would trigger a sharp upturn in mobile advertising. For 2006, Informa has forecast mobile advertising spending of $871 million, rising to $1.5 billion by the end of 2007. I have seen a few varied reports predicting Mobile Ad Spend growth. The Shosteck Group Study released last month estimates Mobile Advertising will be worth $10 Billion by 2010. Informa estimates $11 Billion within 5 years. Either number still suggests that Mobile is currently the fastest growing advertising medium. Link: Reuters 09/07/06 - Mobile Ad Spending set to Jump
Advertising spending has increased by 5.1% during the first half of this year verse the same period a 
year ago, according to Nielsen Monitor-Plus. Many media categories saw a bump, however the largest gains were led by internet advertising (+49%), Spanish-Language TV (+21.8%) and Local Magazines (+10.4%). Network TV increase 6.3%, while National Cable TV saw only a 0.4% rise. Spot TV in the top 100 markets was up 3.5%; however, the smaller DMAs were down -0.6%. Network Radio continued in its slump at a -3.5%, while Spot Radio saw a modest increase of +1.4%. The largest increases came in the telecommunications field, with AT&T leading the pack with a 51 percent jump to $964 million while half of the top ten advertisers reduced spending including overall No. 1 GM, down 3% to $1.7 billion. Link: MediaDailyNews 09/01/06 - Nielsen: First Half Ad Market Grows 5.1%
Despite YouTube's status as an emblem of online media, it's never been easy for the company to claim much of this years predicted $17 billion online advertising market.
Starting today, the video-sharing site plans to let advertisers create "channels" filled with clips they produce themselves and then in turn sell sponsorships to other advertisers. A "channel" from Warner Bros. Records dedicated to Paris Hilton's new album, which features ads for Fox Broadcasting Co.'s "Prison Break," is among the first such marketing vehicle to launch on the site. Placing ads within ads further blurs the traditional lines between entertainment and its sponsors and YouTube’s management hopes the trend develops into a lucrative source of revenue. Link: laTimes.com 08/22/06 – Video Site to Add to Ads. Past SMM Post: 07/28/06 - New "Clip Culture" Causes Advertisers to Panic and 07/17/06 - Monetizing YouTube and MySpace's monster Traffic
Google announced earlier today that it had entered into a syndication deal with Viacom's MTV Networks. The plan is to syndicate a host of video clips, both professionally produced and user-generated, to publisher sites in the AdSense network. Google originally broke the news that it was integrating video into it’s successful AdSense product this past May however now that the first big name has signed on with clips from such popular MTV Networks shows as "Laguna Beach" and "SpongeBob SquarePants", it should draw a lot more interest. The deal will split ad revenue between the hosting site, Viacom and Google. If the test, which will begin later this month, proves promising, it could help change the business model for distributing video online and improve on AdSense's revenues, which last year totaled $2.7 billion.
According to a recent Kagan Research report, local cable advertising revenues grew just 3% in the first quarter (trailing the 11% revenue gains estimated for national ad-supported cable networks). Most broadcast groups are feeling a similar pain however they have more experience in handling slowing revenue growth. If your pacing behind its getting late so don’t miss one of this years greatest opportunities – Political - particularly if you're located in a political jurisdiction which is considered to be in play - - a number which seems to be increasing on almost a daily basis.
Even without a presidential race, the 2006 political advertising market is roaring. Candidates and issue-oriented groups have spent $440 million on advertising through early June. That’s $110 million more than political advertisers spent in 2004 through the same date. Overall, U.S. political ad spending is projected to top $1 billion overall, most of it flowing over broadcast and cable TV outlets. What is the catalysis driving 2006’s growth: 36 races for state governor. Television will account for close to 85% of all political spending, helping the industry make up for the defection of some other ad categories to new-media outlets and Spot cable should get a strong share of spending from U.S. House and Senate races believed to be “in play”. In these markets it is very important to do all of your ground work on these accounts now because TNS Media’s Campaign Media Analysis Group projects that more than 90% of the dollars will flow over the final 60 days of campaigning. All indications are that the final total on political in 2006 will blow away that spent in any other mid-term in history, and will probably blow away most of the presidential years. The balls in your court!!
Online sales are expected to climb 20% this year to $211 billion, according to a recent study. While travel is expected to lead the way with more than $70 billion in sales, other categories expecting strong growth include computer hardware and software, cars, and apparel. Link: ZDNet/Reuters May 22, '06 - Online Sales expected to rise 20% in 2006
YouTube, an online viral video outpost that already streams some 40 million videos per day, has completed agreements with several Advertisiers. Nike, Warner Bros., MTV2 and
Dimension Films are among the first set of marketers littering the site with commercial clips. For those unfamiliar with YouTube, it's a huge destination for any kind of video content. Users can stream any video uploaded to the site and made available to the public. The most popular clips get shared virally and the number of plays can increase exponentially in a short period of time, which makes it particularly compelling for advertisers. USA Today spoke with a number of marketers, agencies and media buying firms, who highlighted the viral nature of the site and the low cost of entry (No Cost!!). For example, Nike recently uploaded a gritty clip of Brazil's FIFA World Football (soccer) Player of the Year Ronaldinho performing various moves with the ball. Since then, the clip has been watched 3 million times, as consumers e-mailed it to each other and posted it on their social networking profiles. Link: USA Today.com 04/17/06 - Marketers are into YouTube
Outdoor Advertising upsurge
I do my best to say abreast to all sectors of the Advertising industry because I enjoy spotting tends and studying how they effect each other. In the resent past the Outdoor Advertising business has been witnessing a lot of sizable growth. The leading companies in this group are Viacom, Clear Channel and Lamar. On Tuesday evening I caught a quick segment as Jim Cramer was commenting on the business, “Billboards are making a comeback” he said on his "Mad Money" CNBC show, and he is Bullish on Lamar Advertising.“Lamar has ad space on billboards, buses, bus shelters and benches all places you can't miss, Cramer noted. Because of the increase in the use of digital video recorders such as TiVo, advertisers are moving away from TV advertising. Other forms of advertising, such as the Internet and billboards, are gaining share. You can't TiVo a billboard," he said. Lamar is adding digital billboards, which allow it to show multiple ads on one space and should increase sales. And Nielson is coming out with a rating system (more on this soon) for billboard advertising, Cramer said, which should make advertisers more comfortable as the can quantify the effectiveness of their ads. Enhancements and dropping cost on digital printing, flat panel displays and emerging technologies like electronic paper displays (see E Ink) will also revolutionize this industry in the not to distant future. Links: Lamar Advertising Company, OAAA’s – History of Outdoor Advertising
